January 2018

Varying development standards just got a bit more complex — update on clause 4.6 variations

The NSW Government has made changes to the procedure for varying development standards for development applications. Town planners and other people who prepare such applications need to know about the new requirements. They apply immediately – even to existing development applications that have already been lodged but not yet determined.

On 15 December 2017 the Department of Planning and Environment (the Department) published planning system circular PS 17-006 ‘Variations to development standards’.

This new circular revoked two long-standing circulars of significance – a 2008 circular (‘Variations to development standards’, PS 08–003) and a 1989 circular (‘Circular No. B1’).

Background

Local environmental plans and state environmental planning policies contain a wealth of development standards that regulate the type of development that can be given a development consent.

These standards cover different aspects of a proposed development. They include well-known types of standards, such as those relating to building height, floor space ratio and minimum lot size. However, the planning system is also bedevilled by a wide range of more obscure standards.

From the earliest days of modern land use planning, it has been recognised that rigid adherence to pre-determined standards can lead to an inferior result. This is explained in the 1989 ‘Circular No. B1’. The circular said that ‘numerical standards are often a crude reflection of intent’. It said that a development may achieve the underlying purpose of a standard even though it does not comply. It recognised that such variations could be numerically small or large.

The modern mechanism for allowing this flexibility is clause 4.6 of the standard instrument prescribed under the Standard Instrument (Local Environmental Plans) Order 2006 (the Standard Instrument).

In some areas where the Standard Instrument does not apply, this flexibility is made possible under the older State Environmental Planning Policy No 1—Development Standards (SEPP 1).

Both clause 4.6 and SEPP 1:

allow the applicant to make a request/objection in relation to a development standard as part of their development application; and

say that before development consent is to be granted (on the basis of that request/objection) the concurrence of the Secretary of the Department must be obtained.

However – in the overwhelming majority of circumstances – there has been no actual need to refer development applications to the Secretary for concurrence. This is because circulars were issued in 1989 and 2008 notified local councils that they could ‘assume concurrence’ under clause 64 of the Environmental Planning and Assessment Regulation 2000 (the Regulation).

However, on 15 December 2017, those old circulars were revoked. They have been replaced by a new circular. The new circular makes five key changes – although not all of these changes are apparent on a casual reading of the document.

Our assessment of the key changes is set out below.

Some variations will need to be dealt with by full council if concurrence is to be assumed

If:

the development standard is non-numerical; or

the development standard is numerical and the proposed variation is greater than 10 per cent,

concurrence can only be assumed by a consent authority when a ‘full council’ determines a development application.

This phrase is generally understood to mean a meeting of the councillors of a local council, rather than a meeting of a council committee or panel. If such an application is to be dealt with under delegation or by a regional planning panel, a concurrence from the Secretary is now required before development consent can be granted.

Additionally – since 1 September last year – local councillors have lost their power to determine development applications in any local council that had an existing independent hearing and assessment panel (IHAP) in place. This means that (right now) in at least 15 local councils there is no longer any capacity for the concurrence of the Secretary to be assumed for the variations described above (as, in those councils, the full council cannot determine any development applications).

Examples of such local councils include Strathfield Council, Mosman Council, Waverley Council, Northern Beaches Council, Georges River Council and Liverpool City Council.

By 1 March 2018 the remaining councils with the Sydney metropolitan area will be obliged to establish local planning panels. Once local councils do this, their ‘full councils’ will also lose the power to determine development applications. When this happens, those councils too will lose the ability to assume the Secretary’s concurrence (where the development standard to be varied is non-numerical or exceeded by 10 per cent).

The overall effect of this change is that, after 1 March 2018, only local councils outside of the Sydney metropolitan area and the City of Wollongong will be able to assume the Secretary’s concurrence for development applications which rely on these types of clause 4.6 request.

Local and regional planning panels have been introduced as an integrity measure. For this reason it is surprising that meetings of councillors outside of Sydney and the City of Wollongong will have the power to vary a numerical development standard by more than 10 per cent (without the Secretary’s permission), but panels will have to wait for a concurrence from the Secretary before they can do the same thing.

Hopefully this is not an outcome that was intended by the Department (and will be fixed by a further planning circular).

Any assumption of concurrence is now subject to preconditions

Concurrence can now only be assumed if the consent authority has first considered (in relation to a clause 4.6 request):

whether contravention of the development standard raises any matter of significance for state or regional environmental planning; and

the public benefit of maintaining the development standard.

This is a new requirement. It did not exist under the previous long-standing ‘assumed concurrence’ arrangements. (While these considerations are referenced in the current text of clause 4.6, they did not actually operate as mandatory considerations because of the previous ‘assumed concurrence’ notification.)

The requirement to consider these additional matters is, in most cases, not likely to lead to a different decision on a development application. However, it does mean that it would be prudent for any new clause 4.6 request to explicitly address these matters. As there are no transitional arrangements, anyone with a pending development application (that includes a clause 4.6 request) may want to lodge a supplementary letter with the Council to cover-off on these issues.’

Applicants should be aware that consent authorities may (for political or other reasons) decide that they do not want to consider whether a proposed contravention of the development standard raises any matter of significance for state or regional environmental planning. If a consent authority takes this approach, it will not be able to assume concurrence, and the matter will be sent to the Department for its consideration and concurrence. This option was not previously available to consent authorities.

Affected development applications must identify the Secretary as a concurrence authority

There is an existing legal requirement that all development applications must identify ‘concurrence authorities’. This information typically is set out in the statement of environmental effects that is lodged with a development application.

However, development applicants do not normally nominate the Secretary of the Department of Planning and Environment as a ‘concurrence authority’ when a clause 4.6 request is made. This is because – under the ‘assumed concurrence’ arrangements that applied until 15 December 2017 – the concurrence of the Secretary was assumed without qualifications or conditions (for almost all clause 4.6 requests).

However, under the new arrangements an applicant will not know whether concurrence can be assumed when an application is lodged.

For example, if a local council (or panel) decides that it is unable to (or does not want) to consider whether ‘contravention of the development standard raises any matter of significance for state or regional environmental planning’ the council will be obliged to seek the concurrence of the Secretary (before a decision is made to grant development consent). An applicant cannot be certain, in advance, as to the Council’s or panel’s attitude in this regard.

This means that — for all clause 4.6 requests (and any objection made under SEPP 1) the applicant is now obliged to nominate the Secretary as a concurrence authority as part of the development application (as per clause 1(1)(f) of Schedule 1 of the Regulation).

‘Deemed refusal’ appeals now only available 62 days after lodgement for affected applications

There is no longer any unqualified ‘assumed concurrence’ from the Secretary when a clause 4.6 request or SEPP 1 objection is made. This means that the ‘deemed refusal’ appeal right for such development applications will not be available until the 62nd day after lodgement (compared with the standard period, which provides for a ‘deemed refusal’ appeal right from the 42nd day following lodgement).

However, once the matter is in the Land and Environment Court on appeal, the Court retains full power to deal with the application. This is because the Court has the power to make a final decision to grant a development consent, despite any concurrence requirements.

Some areas fall through the cracks

There are now no ‘assumed concurrence’ arrangements in locations which are:

not the subject of clause 4.6 in the Standard Instrument; and

not covered by SEPP 1.

The old notification (PS 08–003, now revoked) applied to any clause in an environmental planning instrument that was based on a substantially similar format to the Standard Instrument clause 4.6. This provision has not been carried over to the new notification.

This means, for example, that there are now no ‘assumed concurrence’ arrangements in the areas covered by precinct plans set out in the appendixes of the State Environmental Planning Policy (Sydney Region Growth Centres) 2006. While these precinct plans contain a clause modelled on clause 4.6 of the Standard Instrument, the provision is not (as the new assumed concurrence notification requires) ‘clause 4.6 of the Standard Instrument (Local Environmental Plans) Order 2006’.

In these areas the concurrence of the Secretary will need to be obtained before a development consent (requiring a varied development standard) is granted. If this is not possible, the Land and Environment Court will have the power to grant development consent in an appeal (subject, of course, to the Court decision on the merits of the matter).

To be clear

To be clear, the Secretary’s concurrence can still be assumed by a consent authority (including any authorised delegate) if:

the Standard Instrument or SEPP 1 applies;

the development standard is numerical;

the proposed variation is 10 per cent or less;

the exclusions in relation to minimum lot size standards (similar to longstanding exclusions) do not apply; and

the consent authority considers:

whether contravention of the development standard raises any matter of significance for state or regional environmental planning; and

the public benefit of maintaining the development standard.

The situation gets more complex (as outlined above) if some or all of the above points cannot be ticked.

The bottom line

The above procedural changes are unlikely, in most cases, to lead to any different substantive decisions by local councils, panels or the Land and Environment Court.

However, the changes do mean additional procedural hurdles. In some cases it is likely to mean some delays (and extra costs for a proponent) before a development application is determined. It also means that consultants such as town planners (in particular) and architects will need to take even greater care in preparing clause 4.6 variation requests and SEPP 1 objections.

Some consequences of these changes may have been unintentional and might be clarified by a further planning circular. No doubt the development industry will watch this space with great interest.

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